AutoCanada Inc.

Pat Priestner - Executive Chairman Tom Orysiuk - President & CEO Stephen R. E.

Rose - COO Christopher Burrows - VP & CFO

Anthony Zicha - Scotiabank Steve Arthur - RBC Capital Markets Chris Murray - AltaCorp Capital Derek Dley - Canaccord Genuity Mark Petrie - CIBC World Markets Inc. Stephen Kammermayer - Clarus Securities Inc.

Christopher Bowes - National Bank Financial

Thank you. Good morning and thank you for taking the time to attend our conference call for the fourth quarter and annual results of 2015.

I’m Chris Burrows, Vice President and Chief Financial Officer of AutoCanada. On the call with me today is Tom Orysiuk, President and Chief Executive Officer; Steve Rose, Chief Operating Officer and Pat Priestner, Executive Chair.

Before we continue with the call, let me remind everyone that certain statements in this presentation may be forward-looking in nature. I refer you to our more complete disclaimers contained in our most recent Annual Information Form.

In summary, these include statements involving known and unknown risks, uncertainties and other factors outside of management’s control that could cause actual results to differ materially from those expressed in the forward-looking statements. AutoCanada does not assume responsibility for the accuracy and completeness of the forward-looking statements and does not undertake any obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

For additional information about possible risks, please see the Annual Information Form dated March 17, 2016, which is available on the SEDAR Web site. With that, I’ll now turn it over to Pat.

Thanks, Chris. 2015 was obviously a challenging year for the Company and we were used to kind of have really good years and really good quarters and obviously a little different 2015 was.

Although we’re not by any measure pleased with these results. Believe me, it was not a lack of effort.

We saw the economic headwinds coming to our Western, in particular Saskatchewan, and Alberta operations. Perhaps we could have moved a little bit more quickly to operating sort of in an offensive mode, we chose for a period to attempt to break through the declining consumer confidence, which was obviously caused by the rapid decline in oil prices and this has led to a significant increase in unemployment, lessening of consumer confidence and a greater difficulty in consumers obtaining auto loans, particularly in Alberta.

And that choice was our decision and home site was probably not the right choice. Having said that, although the long-term strategy remains the same to grow the business and grow it profitably, management has altered its short-term plan to better align with the economic deployment that we’re continuing really in the short to mid term, the details of which Tom is going to speak a little bit more about.

There has been some comment about the wisdom investing in Alberta and to somewhat of a degree Saskatchewan in view of the heavy reliance of oil in those provinces. To this, we really have a pretty firm view.

We do agree that regional diversification is a sound strategy and we’re going to continue down that path. However, we also believe and believe very strongly that the right time horizon for the Company is always the long-term and that over the long-term the West has proven to be a very robust and profitable auto retail market, the best in Canada.

And we’ve not altered our view on this. And current volatility notwithstanding we firmly believe that Alberta and Saskatchewan market shall prove to be very profitable and desire again in the long-term.

Lastly, I wish to address succession. There is never a really good time I suppose to effective succession plan, particularly when you have been so very, very involved with an organization as I’ve been for really most of my working life.

But succession is in the nature of things and life and putting in place a great leadership team with the ability to build for the future is and must be a key focus of leadership, and that I’m very pleased to say we’ve done. AutoCanada is blessed to have an extremely good capable and experienced management team with Tom, Steve, and myself have added to as we’ve grown.

The opportunity that compliment this team by adding Steven Landry, what is really, really, really awesome. I mean, he is just a great auto pedigree and experienced, was an opportunity for us that was simply too good to ignore.

So we acted upon it. By providing a target retirement date for myself, we built in flexibility to ensure that the transition will be a successful one and that the Company will be on a great footing prior to my actually leaving.

I’ve tremendous confidence in both Steven and Tom, and I love this Company. But there comes a time when you’ve to be willing to let go a little bit if you want to properly plan for the future by attracting top, top talent.

You simply cannot create great teams to take you in the future, if you do not make some room for them. That is what is best for this Company and I’ve always tried my best to do what I believe was in the Company’s best interest.

It’s not really about fixed dates in attempting to create absolute certainty. If I’ve learned anything in my 40 years in this business, it is that the auto world constantly evolves, and the winners are those who spend their time getting ahead of this change rather than fighting to keep the world from changing.

It’s about adopting in a way that you believe is best for the Company. Great people don’t come along on the exact date of our choosing.

They appear when they appear, and your options are to take advantage of that or not. We are very proud of what we’ve built and what we’ve accomplished and what is most important is to ensure that the great foundation that we’ve worked so hard to build can be further built upon.

And Steven’s willingness to join the team and lead AutoCanada into its next decade, gave us that choice. All of us, Tom, Steve Rose, who had worked very closely with Steven for a number of years in the same company, the Board, and myself, all chose to take advantage of this opportunity.

There is simply no question in my mind or the teams mind that the teaming up Steven and Tom and the rest of our management team is in the best long-term interest of the shareholders and AutoCanada, and that matters to me as someone who built this Company, who is the founder, and is a large shareholder and I’m extremely optimistic as we move forward. Chris, you’re going go over to the financials?

Yes. Thanks, Pat.

2015 has proven to be a challenging year for AutoCanada. Our higher sales and gross profit results in 2015 are the direct results of our acquisition completed during the year.

Despite our challenges, we exceeded $2.9 billion in revenue and reached $89.8 million in EBITDA attributable to AutoCanada shareholders. During the year, we acquired six dealerships including six franchises, and now represent eight manufacturers, 19 different brands; we operate in eight provinces and employed almost 4,000 staff.

We are pleased with the dealerships we acquired this past year and they’re integrating well into AutoCanada and believe they will provide long-term value for our stakeholders. Our financial results indicate the size and strength of AutoCanada with fiscal 2015 resulting in a 31.1% growth in revenue and for the 27% decrease in adjusted basic earnings per share.

Same-store gross profit decreased by 11.7% year-over-year and we now operate 53 dealerships encompassing 60 franchises across the country. We managed over 800,000 service repair work hours and are 912 service days.

Also during the year, we were successful in completing a $75 million equity offering complimented by an amended syndicated revolving facility of $250 million. Generally speaking, the automotive retail sector in Canada improved in the fourth quarter of 2015 over the same period of 2014.

Overall, Canadian light vehicle sales -- like vehicle unit sales increased by 2.5% for the three months period ended December 31, 2015 as compared to 2014. As a group, our same-store new vehicle retailer unit sales were down 23.6% quarter-over-quarter.

Our key operating results for the fourth quarter of 2015 are highlighted as follows: our same-store revenue decreased by12.1%, same-store gross profit decreased by 14.3%; EBITDA attributable to AutoCanada shareholders declined by 5.1%; the number of new vehicles retailed decreased by 10%; the number of used vehicles retailed increased by 2%; repair orders completed for the quarter were up 6.6%; same-store repair orders completed for the quarter were up 2.6%. EBITDA attributable to AutoCanada shareholders for the three months period ended December 31, 2015, declined by 5.1% to $23.4 million from $24.6 million when compared to the prior period of 2014.

The decrease in EBITDA attributable to AutoCanada shareholders for the quarter can be mainly attributed to tightening markets and lower achievement of sales volume incentives [ph] in certain stores. Revenues from all dealerships for the fourth quarter of 2015 increased by $17.1 million or 2.6%, up to $672.3 million from $655.2 million when compared to the same period in the prior year.

Gross profit from all dealerships for the fourth quarter of 2015 increased by $10 million or 8.8% when compared to the same period in 2014. Gross profit increased due to increases across three revenue streams, used vehicles, finance and insurance, and part service and collision repair revenues as a result of the six dealership acquisitions since the fourth quarter of 2014.

During the three months period ended December 31, 2015, operating expenses increased by $11 million or 12.2% to $101.3 million from $90.3 million in the same period of the prior year, primarily as a slowdown of the economy during the fourth quarter. Operating expenses as a percentage of gross profit increased to 81.8% from 79.2% from the same period of the prior year, primarily due to the fixed components of operating costs compared to reduced gross profit.

In terms of annual operating results, new light vehicle sales in the Canadian market were up 2.5% in 2015 when compared to 2014 and surpassed 1.89 million in unit sales. New light vehicle sales in Canada include retail, fleet, and daily rentals, the proportions of which are not separately disclosed.

AutoCanada focuses on retail sales as they’re more profitable than fleet, and daily rental sales. Of the Company’s total same-store new vehicle unit sales, 79.6% are retail unit sales.

The Company’s same-store retail unit sales of new vehicles has decreased by 16% during this period. As a result, the Company is unable to compare the same-store performance with respect to new retail unit sales to industries unit retail sales.

AutoCanada’s higher sales and gross profit results in fiscal 2015 are a direct result of its acquisitions completed during the year, as well as the impact of the 17 acquisitions completed in 2014. However, same-store revenues and gross profit have decreased slightly over the year.

Overall, sales for the year increased by $689 million or 31.1% including a 5.9% or $95.3 million same-store sales decline over the prior year. Gross profit for the year ended December 31, 2014 increased by 30.7% with a decrease in same-store gross profit of 11.7%.

Our used vehicle sales increased by $209.2 million or 42.2% with used vehicle sales volumes increasing by 29.4% in 2015. Our used vehicle gross profit increased by $11.1 million or 37.7% over 2014.

Our key operating results for the 2015 year are highlighted as follows: same-store revenue decreased by 5.9%, same-store gross profit declined by 11.7%; EBITDA attributable to AutoCanada shareholders increased by 0.4%; number of new vehicles retailed increased by 16.4%; the number of used vehicles retailed increased by 29.4%; repair orders for the year were up 40.9%; and same-store repair orders completed for the year were up 1%. EBITDA attributable to AutoCanada shareholders for the year ended December 31, 2015, increased by 0.4% to $89.8 million from $89.4 million when compared to the results of AutoCanada for the prior year.

The increase in EBITDA attributable to AutoCanada shareholders for the year can be mainly attributed to acquisitions completed during 2015. Revenue for the year ended December 31, 2015 increased to $2.9 billion from $2.2 billion in the prior year.

This 31.1% year over increase in revenue for the period was mainly driven by increases in all four revenue streams as a result of six dealership acquisitions in 2015, as well as the impact -- the annualization impact of 17 acquisitions completed in 2014. Gross profits earned from all dealerships increased by 30.7% to $488 million compared to $373 million in 2014.

As a result of the increases across all four revenue streams, as a result of the six dealership acquisitions in 2015 and the integration of new dealerships acquired in 2014. Operating expenses increased by 36.1% to $395.9 million from $290.9 million in 2014.

Operating expenses as a percentage of gross profit increased to 81.2% from 78% in 2014. This increase was driven by the slowdown in the economy during the year and the time lag in the corresponding reduction of operating costs.

The Company has been focused on integrating the dealerships acquired in the prior year and dealerships acquired during this year. Due to the increase in acquisition activity over the past two years, integration of individual dealerships has been a main focus in ensuring the new dealerships implement policies and procedures, as well as best practices which we believe are main drivers in delivering long-term shareholder value.

With that, I’ll turn things over to Tom.

Thank you, Chris, and Pat. Well, performance of the Canadian economy continues to be flat with continued downward pressure in Western Canada, which has negatively impacted consumer confidence and continues to challenge the auto retail sector in Western Canada.

As a Western Center Company, management has implemented a five point strategy to mitigate the impact of this situation. Firstly, the Company continues to purse a regional diversity in its acquisitions where possible.

That does not mean that we will ignore Western Canada, for we won’t. As we believe in the long-term future of the Western Canada auto retail market, we shall take advantage of the appropriate opportunities if they become available.

In short, we shall pursue acquisitions which we believe will drive long-term shareholder value. Secondly, the Company will direct greater resources to increasing dealership integration efforts to take advantage of all possible synergies and share the best practices.

Third, we shall continue to conservatively manage the Company’s balance sheet. In times of economic turbulence, there is no greater security than having a strong balance sheet.

We’ve always had a conservative philosophy when it comes to our balance sheet and we shall not deviate from this. In particular, I note the $75 million equity raise in 2015 and the successful negotiation of an increase for a revolving credit facility by $50 million during the year, as well as part of the revolver negotiation we also renegotiated our covenants which together with the Company’s free cash flow from operations provides us with the flexibility to meet our capital requirements and a solid base to continue to pursue attractive acquisitions.

Fourth, to expedite the developments and rollout a certain marketing and sales process technologies to our dealerships to maximize all sales opportunities in a more challenging economic climate. Lastly, we’re currently very gauged in the cost review and cost reduction initiatives.

Specifically working with our dealer partners, the management has developed and communicated and is currently executing upon measurable goals and the expected timeline for meeting these goals throughout 2016, with the target of a $15 million reduction in annualized operating costs across the group with an expected savings of not less than $10 million in 2016. With our strong balance sheet, we believe, we’re well positioned to seek out and acquire quality acquisitions at reasonable multiples and with the succession plan changes put into [ph] by Pat of which I’m very supportive, we shall take the Company into its second decade with the ability to achieve sustainable long-term shareholder value, which I’m very much looking forward to being a part of and I’m very excited about.

Thank you for your continued support. And I will now open the meeting up to any questions.

Hi. Good morning, gentlemen.

Tom, in light of the executive changes, how will AutoCanada manage their OEM relationships?

You know we’re going to continue down the path that we’re Anthony, I’m really excited about having the ability to work with Steve, and he is highly regarded throughout the auto industry, has considerable experience in North America, Europe, not only in Canada. And of course, Pat is going to continue to be involved with the Company, I’m sure that there is a smooth transition.

So, I just think this is going to be fantastic.

Okay. And second question with Pat's pending retirement, will someone be entirely focused on acquisitions and moreover what happens to the GM relationship in investments that Pat is responsible for, including Honda?

Anthony, it’s Pat. I guess, there is a couple of questions there.

I spoke with Steven again last night. He is extremely motivated.

When we discussed, at good length how we’re working together, obviously we had a number of conversations on that, but last night came home to be after the press release and we obviously had a great conversation and we specifically talked about acquisitions last night again. I’ve been pretty involved in that obviously and I’m going to continue to be involved and that was Steven.

And that’s something that I don’t see changing a whole lot. I’ll be involved as long as necessary on that.

That’s one of the things we put in -- I’m going to be flexible on all the stuff, but the acquisitions between Steven and I, there will be absolutely no concern. Your second question to General Motors, obviously I cannot speak for manufacturer and never have, but I really don’t see any change at all.

We have appropriate agreements in place to ensure that everything will run as smoothly as it can. And we’ve a tremendous relationship with General Motors.

They’ve been fantastic with us. We love the brand.

Got real good dealers in those stores, we’re working well together honestly and I don’t see any change at all.

Okay. And my last question, are your OEM quotas for 2016 achievable?

Well, go ahead Tom. That’s a double good question.

It really goes store by store and I think that we can hit a good proportion of them. Its good challenging operating environment and mostly OEMs have recognized that [indiscernible] with their quotas.

Okay. Well, thank you very much.

Great. Thanks so much.

Just a couple of follow-up questions. You commented in the press release and your comments this morning, 2016 being a more challenging year than 2015.

Just curious if things have changed at all since what your press release commented on about a month or so ago? And if in particular you see this point that the earnings being down year-over-year or the cost initiative should be enough to kind of offset that?

That’s a really good question. One of the things that come to light over the last month is we’ve had some data on consumer confidence, particularly, in Alberta that we’ve all seen and we’ve had an all-time low for Alberta and I think it was the third week of January.

And the fact of the matter is, is we’re selling large discretionary items and when the confidence is down, that can have a bit of an impact. We continue to see turbulence in the economy.

Frankly, we sell vehicles, we repair vehicles, that’s what we good -- that’s where we’re good at, that’s where we’re focused at and that’s what we’re going to focus at -- focus on. And we think the cost initiative reductions that we talked about are the right step.

We are really happy with the progress we’re making there. We’re working very closely with our partners and we’re going to manage the Company very prudently going forward.

Okay. So I guess, difficult to say really at this stage whether that’s up or down on the year, at the bottom-line level, but …?

[Indiscernible] Steve, with another 10 months -- 9 months.

Okay.

And Steve, it’s Pat. I think one of the great things about our business -- in the dealership business not just us, but all dealers in North America is the manufacturers want to sell vehicles too, we are not out here on our own.

Like we have a lot of support and I’m sure they see the numbers coming through, I mean, they’ve their targets. They want to hit those numbers and they need markets like Alberta and Saskatchewan to sell a lot of vehicles.

So, I suspect as Tom said, we’re only a couple months into this. They’re going to help us a bit too.

They want to sell vehicles. So, that’s clearly all dealers’ benefits.

Okay. Okay.

And one other, just following up on Anthony’s question about your relationship with the manufacturers GM and Honda, really there is probably something you can and can’t talk about with this, but just in terms of your discussions with them are they aware of these changes with Pat's plans and is there some understanding of what would happen to the current ownership positions or if you were to acquire another GM or Honda store, how that would work with the co-investments?

That’s a fair question for sure. I don’t really like to talk about individual manufacturers, we never have.

Okay.

As I said, we’ve a great relationship with them and I don’t really see a whole lot of change. I’m planning on continuing to support AutoCanada the way I have in the past, no change whatsoever in our plan and how we’d do the GM stuff and things like that.

So honestly Steve, I just don’t see it as an issue, but maybe or will be, but honestly I don’t see it.

Okay. Then just a couple of very specific ones just on segment margins.

F&I gross margins looked very strong in the quarter at 99% or something like that. Was there a change that, one-time item in there that cause that or an accounting change to some sort that took it up that high?

No, I think honestly what’s happening in the quarter there is a reclassification between revenue and cost of sales on a one-time basis. The overall margin in F&I for the year would be a more appropriate measure of F&I profitability.

Okay. That helps.

And final one just on same-store parts and service margin, gross margin there was a little bit lower as well. Is that further one-time things or is that a reflection of the times?

No, there nothing specific in there, Steve. I think that’s a more reflection of the economic climate that we’re in.

Okay, thanks. I will pass the line for now.

Thanks, guys. Good morning.

Just Tom, maybe Pat, maybe you can talk about a little bit about how Steve is going to fit into how you guys will manage the Company both, I guess, up and with the acquisition strategy?

Well, I think I’ve covered Chris the acquisition strategy. I don’t think there will be hardly any change on there.

I will just work fairly very, very closely with Steve and he is very, very qualified person. And I will do that as long as necessary.

Steven and I’ve a great relationship. We go back over 20 years.

So I see no issue whatsoever. If anything it’s probably a benefit.

Steven knows a lot of people. One of the advantages that maybe sometimes people from the outside don’t see much is what your relationships are and how important they’re in getting things done and all the connections you have and I’ve been blessed in my life to have so many good relationships.

Steven has a lot of relationships as well that no one else here would really have. And above -- he would know a lot of the same people I do, but also he even knows a lot of people that I don’t know.

So, I think on the acquisition side, I think its -- if anything it’s a benefit having Steven with me on that. As for running the Company, I think you’re kind of asking about how that might work?

Again, what we’re trying to find and its very difficult to find is someone who is a really, really strong CEO that’s also a dealer person and its so difficult to do that. Tom has learned so much about that in the last 10 years, but to be able to bring someone in that Steven is known as -- actually a good example of yesterday just before the press release reached to five or six of our dealers, that would have known Steven well from his days as years ago as Chrysler Canada President, before he went over to the States.

And the reaction of all of them was like wow, fantastic, can’t wait to work with him. He really understands the retail side of the business.

So, I think between him and Tom there is so much work to do. I think what one of the things we want to do is a little bit more involvement with our senior, senior people at the dealership level and its very hard for just one or even two people to do that.

We probably need three or four people that are out in the dealerships little more. So, this just brings us a little more flexibility with Steven, Tom and Chris and the rest of the team here as well.

So, completely see this as unbelievably good for the Company.

Okay, great. And then just thinking about you’ve had a couple of questions already on sort of the relationships.

Are you seeing any movement on the OEMs in terms of how their one-on-one structure [indiscernible] agreement at this point or is it still -- its still going to be slow and does Steven bring anything to that conversation that may change that dynamic in the future?

Hard to say. Steven has some really strong relationships throughout the industry, so it certainly can’t hurt us, but my position for the last 10 years is that I don’t really get into talking about what manufacturers may or may not do.

I think over time, we’re going to win this, I really do [technical difficulty] specifically on one particular manufacturer.

Okay, great. And then just turning to -- just looking at gross margins, actually we’re little bit better than I’d have expected, given some of the downturn.

Do you feel what you’ve got the cost base in the right place relative to your expectations for revenues in 2016 or store released [ph], -- I guess, what I’m trying to get out is we get into Q1, Q2, I know last year gross margins were a little bit impacted just with the rapid change. Do you think we will get to more normalized run rate as we enter the New Year?

Chris, great question. I think that we’re aware we need to be on a historical run rate.

So, I think its fair to assume that we will see our OpEx as a percentage of gross profit kind of more in line with our historical trends. That said, we’ve got as we talked about earlier, we got a number of kind of cost savings initiatives, which should help to further reduce our OpEx as a percentage of gross.

So, I think where we need to be -- don’t have any nasty surprises in Q1, but I think there is more work to be done still.

All right. Okay, thanks guys.

Yes. Hi, guys.

Can you just sort of talk on what you’re seeing here to start 2016, I mean in terms of the cadence of the decline in new vehicle sales. Should we be sort of expecting something similar to what reported in Q4?

What we’re seeing in 2016 is a continual trend from 2015. What I’m particularly concerned about is, when you take a look at Alberta you’re noticing big differences within the provinces.

You might see sales being relatively flat, when one area declines, another increases and others. And it tends to move around as the news goes around, and it’s not something that we can really control.

What we can control and what we are focusing on is, making sure they maintain our market share in the markets that we’re in, making sure that we get appropriate amount of profit every time we sell a new or used vehicle. The weather situation in January wasn’t great.

We had record warm weather. That’s just one year temporary sort of thing.

And we just continue to move forward and focus on what we do well, which is selling cars.

Okay. Thanks for that.

And I’m just, not to harp on this, but just in terms of the structure that you guys have with some of the OEMs. I mean, Pat, when you step aside next year, given that the -- your control on some of these GM dealership, is that something that you’re going to maintain or how is that going to work going forward?

Again, I don’t want to comment, it’s not fair to General Motors or anybody else. As I said, I’ve had a great relationship with them.

The Company has a great relationship with them. I’ve left flexible in here.

We have arrangements that are currently in place that are working really well for everyone. And I -- honestly, I don’t see this as a big issue at all.

I think we’ll just continue to move on.

Okay. And I guess just finally, in terms of your reduction in CapEx.

Can you just talk about some of the initiatives that you maybe, were able to hold back on this year?

Derek, its not -- there was a reduction in CapEx although significant, that’s not related to any individual any significant projects. It’s an accumulation of a number of projects across our dealership group, across the family, across the country, both are not specific to any one -- any particular OEM.

So it’s an accumulation of many smaller projects.

Okay, great. Thank you very much.

Good morning. I wanted to ask about the M&A environment.

I mean, if you could just comment about the general landscape that you’re seeing both within Alberta or energy impacted markets and outside of those markets. And also, as it stands today, what do you view your capacity for acquisitions under your current structure and your current obligations?

I’ll let Chris and Pat, answer the second part of that. It’s been interesting on the acquisition.

I think I said in the last conference call and I firmly believe it, that multiples probable peaked about a year ago, give or take a few months. And I think that is accurate in the market for sure right now.

They’re certainly not going up at all. But one thing that surprised me a little bit is that Alberta hasn’t really dropped the whole lot yet, which says a couple of things.

The dealers in Alberta know how great this market has been for probably 20, 30 years literally. And a lot of them are just hanging on saying; hey, we can afford a lousy year.

I mean this is the best place in Canada to own dealerships. So that’s been a little bit surprising to me.

But in some hands -- ways I guess it shows that the dealerships are pretty good valuable assets, because otherwise they’d be trading for less than they are. But across the country, I’d say they’re coming down a little bit, but not a lot more in Alberta.

That’s the one surprising thing, Mark that I have seen. Go ahead, Chris.

I mean in terms of acquisition capacity, Mark, when I look at the current rank and positioning of our balance sheet, when I think about where we’ll go in 2016, obviously it depends on what is in the pipeline. What I would say is that, we have sufficient capacity presently available to us to make acquisitions throughout the remainder of ’16, likely without coming back either the debt or the equity markets.

So I think we’re in good shape.

Okay, thanks. On the used business, gross profit dollars per vehicle it seemed pretty healthy.

Can you just talk about the used market in general and how big of a factor the Canadian dollar is in your business.

The used markets are definitely picking up. We’ve had a lot of focus on that market over the last couple of years, and we’ve put a lot of systems in place trying to help our dealers with it.

And I think we’re seeing some of the benefits of that, and we’re also seeing some of the benefits of that. And we’re also seeing some benefits of the strength of the used vehicle market.

It’s still difficult to find trades, but its improving all the time. It’s an area that we’re going to continually focus on.

It helps our parts and service business. With respect to the dollar, the reality is, is the product that we’re selling is highly mobile.

If you can move a vehicle very easily from province to province it’s much more difficult to move it from one country to another. But the lower dollar definitely drives up prices.

We turn the vehicles very quickly. So I don’t think we’ve got a lot of a currency exposure, if that’s what you’re getting at, because we turn the vehicles so quickly.

Okay. And then just lastly on the F&I business, could you just talk broadly about what you’re seeing in terms of that market and specifically consumer’s ability to access financing?

On the finance side, we’re seeing access to credit when you talk for our lenders, they’re saying they haven’t really changed their policies, but the [indiscernible] of people qualify for the loans, but we are seeing a lot more request for proof of income which extends transaction times, completion ratios that some of dealerships have dropped a bit, that’s the ratio of the number of applications we get. We actually get to finance and that’s an industry wide statistic.

But by in large, access to credit I would say is, good. The biggest issues I really believe that we face is right now, is the consumer confidence and employment levels.

Okay. And so, I guess, related to that then, the outlook for ’16 in terms of your view on consumer’s access to financing would be basically stable?

Yes, I would call it like it’s 5 out of 10, 5 being kind of normal, broadly across Canada.

Okay. And then just may last question, sales trends outside of Alberta.

Do you think you’re outperforming in the markets where you’re competing under the brands where you are?

Outside of Alberta, yes largely when I -- we take a look at the number of dealership by dealership, we compare them to the competitors and the cities they operate, regions and we’ve worked with our manufacture partners on it as well. Its an area that’s continually focused.

We really push our guys and our guys are really driven to be top performers in each of the markets that they’re in. It’s part of being a good partner with the OEMs.

We really emphasize that.

Okay. Thank you very much.

Good morning, guys.

Good morning.

Just a question for Pat, to start. You said earlier in the call you would continue to support GM in the same way.

Does that mean you’d still be willing to put in a portion of an acquisition price if AutoCanada had such an acquisition in mind?

No, question. Yes.

Okay. That’s good.

And then, maybe can you just give us some of your plans after retirement. Are you still looking to stay in the business in some way?

Honestly, Steve, I haven’t even thought about that for five minutes, literally not five minutes. My focus is, we’ve had 10 really good years at AutoCanada, overcome some pretty significant challenges as a team.

And I’m really looking to where the next 10 years are going. I’ve a lot of my family wealth tied up in this and more than that I have pride, and I want this to go really well and I’m extremely confident going forward with the company.

But I haven’t thought -- honestly I haven’t thought about one thing, its not like I’m going on holidays next week or something.

Okay. So I mean, that sort of leads into my next question, you still own about 9% of the outstanding shares I guess.

So as you sit right now, your plan would be to hold on those I assume?

Absolutely, yes. At this price you’d have to be crazy to sell them in my view.

I look at what the earnings per share power is on these once the economy turns a bit. I mean, just if we never did an acquisition which obviously we’re going to do them, the earnings per share now compared to where they’re going to be is, you’d be crazy to sell them.

Okay. Maybe just moving on, there’s probably a question for Chris, but just moving on to same-store gross margins in Alberta obviously declined here to about 14.5% in the quarter.

I just wonder, do you think we’ve seen the bottom in gross margins here? Would further pressure on them be offset by your cost cutting measures or did they start to trend up as you implement some of your cost cutting measures?

Steve, great question. I think that, if I knew if we were at the bottom that would be wonderful.

The simple reality of it is, is I don’t know whether or not we’re at the bottom in this province. I think that obviously we’ve undertaken the initiatives in regards to our cost structure to try and offset any further decline from a revenue and gross profit side.

So we are hopeful. But for me to say whether or not we’re at the bottom and buffing along the bottom would be premature.

Okay. Okay, great.

That’s all I had, guys. Thanks.

Hi, good morning. Just a quick housekeeping one.

Can you talk about your inventories and maybe what you are seeing in the industry for car inventory?

I think inventory, we’re at a pretty good spot. We’d like to have more fast moving product, high margin hot product, but that’s true for all the Canadian dealers.

We’re kind of, I would say on the inventory level just kind of operating in a normal environment for Canadian auto dealers.

And the industry issues with excess inventory, has that been worked through or is that still out there?

Yes, we’re not feeling a lot of excess inventory, because clearly different from this time last year. I know Pat if you’ve got any more color you want to add to that?

Well, I think it depends by manufacture. But I can tell you, its probably Chris really surprising with the economy that, there’s actually a shortage of product by a lot of the brands.

On the other hand they’re all trying to hit their numbers and, I don’t see that has been an issue with auto, if anything we’re short of some vehicles.

So just on that, how is the supply of used vehicle looking right now?

I think we are seeing some good trade, actually we’d always like more, particularly that one to three year old stuff, and it’s been a challenge getting used vehicles for quite a period now. I think it has actually improved a little bit marginally with a slightly better position that we were lets say for example, a year ago or two years ago.

There’s a lot of demand for good quality used vehicles.

Okay. Thanks very much.

Hi, there. Thanks for taking the question.

We were wondering what the investments in associates, $8.4 million sitting there, what that relates to? Thanks.

That’s actually the financing of a purchase of the Whitby dealership that we made earlier this year, so it’s a financing arrangement, we’re in -- in exchange for the financing we get the return from the dealership.

All right. Thanks.

Okay, well I would like to thank everybody for joining us on the call. And I appreciate you taking the time out of your day and we look forward to reporting you with Q1.

Chris and I’ll be around most of the day if you have some follow-up questions, and we’ll do our best. I have done several meetings, but we’ll do our best to get back to you, and have a great day.

And thanks once again. Thanks everyone.